Capitalism in US History - Blackford & Kerr

Solution Preview

Dear Student,
Hello.This solution should get you started. If you need more information on the topic, you can use the listed references for further research. Good luck with your studies!

Sincerely,
OTA 105878/Xenia Jones
-------------------------------------

Adam Smith's Theory of Pure Competition & the Robber Barons

When Adam smith proposed his views on capitalism via his book 'The Wealth of Nations' (1776), his ideas were based on observable events of an Industrializing world. Philosophically, the enlightenment has brought to question practices and standards of the old regime and ideas of equality, competition and independence were brewing among the minds of philosophers, thinkers and even the most ordinary man. This was, after all the period that has given birth to America when the Founding Fathers came together to declare their views and their intention to unite and fight against what they saw as the abuses of the British Empire and their liege and monarchical overlord - the King. This was the period of Lockean ideals realized when the notion of 'All men created equal' and each writes his own destiny became the very seed of American identity. The monarchical divine right of Kings and nobles to govern man on earth has come into question via logic and reason and abuses of the monarchy, not just of nobles of England but also of France and even that of the Iberian peninsula sparked feelings of discontent among their people and, fuelled by the success of the American Revolution absolute monarchies in Europe soon gave in to new forms of governance and arrangements that balanced or took away the absolute power of the monarchy with a new document or charter known as the Constitution (hence the term - Constitutional Monarchy). These were dynamic times and its dynamism was further energized by discoveries in technological and mechanical breakthroughs. For instance, the creation of the steam engine changed the way goods were made and people travelled increasing capacity, flooding markets with goods, opening up room for employment and competition. The Industrial revolution created prominent trading groups, companies and businessmen whose enterprises have survived even to this day. For Adam Smith, the dynamics of mass production allows for the possibility of perfect competition. This happens when similar goods are made available in the market. Buyers, knowledgeable of the product & services they want to buy and avail can then choose from among these products and services according to a set of conditions that are very particular to their taste and capacity (i.e. inherent characteristics of products, availability, prices, etc.). Additionally, in a perfect market, there will be no restrictions so as to limit the reach of all providers to give advantage to a few. In this kind of market, where providers, sellers and consumers can ...